NFC National Finance Commission

The government after its election within 6 months from commencing day not exceeding 5 years would constitute National Finance Commission.

President of Pakistan shall constitute the Commission as follow.

Federal Government= Finance Minister

Provincial Government= Finance Ministers

Other Persons= President appoint in consultation with Governors of the Provinces.

FUNCTIONS OF THE NATIONAL FINANCE COMMISSION

160 (2) Under the Article, the Commission makes the recommendations in following regards.

160 (2) aDISTRIBUTION

The Commission distributes the Net Proceed on taxes between the Federation and Provinces. For example, if Government gets 1 lac of taxes. It would have say 80, 000 rupees as it net proceeds. Because, the rest of 20, 000 rupees would be its expenditures etc.

(b) GRANTS IN AID

Likewise, the Government allocates special funds for particular projects, institutions, local government or scholars in Provinces. Such funds come under the category of grants in aid from Federation to Provinces.

(c) BORROWING POWER

The NFC decides the limit of borrowing power of the provinces. It shall make to what extent a Province can lend money. However, the commission shall exercise such powers under constitutional limits.

(d) PRESIDENT REFER MATTERS

President of Pakistan may also refer the matters relating to the Commission for its recommendations.

TAXES 160 (3)

So, National Finance Commission distribute the income from the taxes raised under authority of Majlis e Shoora (Parliament). These taxes include following.

INCOME TAXES= collected on income including corporation taxes. However, not including taxes on income of remuneration paid out of Federal Consolidated Fund.

EXPORT DUTIES= Duty is a state tax. It is a transit tax levied on commodities passing through custom areas en route to another country. The money from export duty and any other duty which the President may determine.

EXCISE DUTY= President of Pakistan specifies this duty.

OTHER TAXES= Or any other taxes which the President specifies.

NFC National Finance Commission

PROVINCE SHARE 160 (3 A)

The share of each Province in NFC award shall not be less than in the previous award.